DTI Ratio and Reserves When Applying for a Mortgage
10-12-2011 11:33 AM
Hi Everyone- I have posted a couple of time but usually just lurk but I have a couple of questions about the loan process.
1. I have researched online that the DTI ration should be no more than 25% front-end and 36% back-end. Is this DTI standard for conventional mortgages as well? Also I took a loan out on my 401k last year when I was going through a divorce and am currently paying back the loan (taken from my pay) $112 monthly. Will this monthly loan payment be included in my back-end DTI when applying for a loan?
2. I have also seen mention that the banks these days require reserves when applying for a mortgage. Is there a certain amount of reserves (exclusive ot the down-payment) that you a required to have liquid when applying?